1. The Agreement on Trade in Goods of the Korea-ASEAN FTA, including tariff concession schedules for
products and terms on rules of origin, was concluded at the 11th round of negotiations between Korea and
ASEAN member countries, held during April 23 (Sunday) - 28 (Friday) at Phnom Penh, Cambodia.
- The concluded Agreement on Trade in Goods will be officially signed by the trade ministers of the two
parties at the Korea-ASEAN Economic Ministers Retreat meeting (AEM Retreat), which is to be held in mid-
May in Boracay, the Philippines. The agreement is expected to come into effect within this year, following
domestic ratification.
2. The trade ministers of the two parties had reached an agreement on the main text of the Agreement on
Trade in Goods and its annexed modality on the occasion of the Korea-ASEAN summit meeting that was
held last December in Kuala Lumpur, Malaysia. During the recent round of negotiations, the two parties were
able to conclude all parts of the Agreement on Trade in Goods by reaching a final agreement on the tariff
concession schedules and the annexed text on rules of origin.
- Due to domestic political circumstances, Thailand did not participate in the conclusion of the tariff
concession schedules for goods and is not expected to participate in the official signing of the Agreement
on Trade in Goods, which is scheduled to take place at the Korea-ASEAN Economic Ministers Retreat
meeting in mid-May. As such, the 9 ASEAN member countries excluding Thailand will be Korea’s partners
in the Korea-ASEAN Agreement on Trade in Goods.
3. According to the final tariff concession schedule for goods agreed upon during this round of talks, Korea
and ASEAN are to, in principle, eliminate tariffs on products constituting 90 percent of their respective imports
(according to number and volume) until 2010. The products making up the other 7 percent of imports are to
have their tariffs lowered to 0-5 percent until 2016. Taking into consideration the sensitive nature of the
products making up the remaining 3 percent, items under this group are eligible for receiving protection
through various measures, such as exemption from concessions, long-term tariff reduction schemes, and
tariff rate quotas (TRQ).
4. The Korea-ASEAN FTA is the first FTA Korea has concluded with one of our five largest export markets. It
is expected to increase our mid to long-term exports to ASEAN by US$10 billion and our trade surplus
vis-à-vis ASEAN by US$6 billion.
- In particular, with the elimination or reduction of ASEAN member countries’ tariffs on major Korean exports
such as automobiles and steel products, Korean corporations are expected to secure a more advantageous
position in the export market to ASEAN compared to major competitors such as China and Japan.
-- Although China concluded an FTA with ASEAN ahead of Korea in July of 2005, the FTA has been unable to
bring about substantive market liberalization in most major items traded, including automobiles and steel,
because the FTA did not establish a ceiling on the amount of imports for highly sensitive products. On the
other hand, since the Korea-ASEAN FTA has established a strict ceiling for imports of highly sensitive
products, it is expected to bring about more substantive market liberalization.
-- Japan has concluded an FTA with Malaysia separately, which has not yet come into effect. While it has in
principle agreed upon pursuing FTAs with Thailand and the Philippines as well, these parties still have
working-level issues that must be dealt with. In addition, the FTA Japan is pursuing with Indonesia is still in
the process of negotiation. Meanwhile, by concluding an FTA with all 9 ASEAN member countries (excluding
Thailand), Korea has obtained a stronger position in the ASEAN market.
-- Especially in the case of automobiles and steel, the level of tariff concessions by ASEAN countries to
Korea under the Korea-ASEAN FTA is generally higher than the concessions made by ASEAN countries to
China. With the exception of the FTA between Japan and Malaysia that has not yet come into force, Korea
has a more advantageous position in the overall ASEAN market compared to Japan as well.
- Korea has also prevented the shock resulting from market liberalization by including rice and most of our
sensitive agricultural and marine products within the 3 percent category of highly sensitive products, which
can receive protection through measures such as exemption from concessions and long-term tariff
reduction schemes.
-- Rice, poultry, frozen and live fish, garlic, onion, hot peppers, and most fruits have been categorized as
products excluded from concessions.
5. Furthermore, in this round of negotiations, the two parties discussed in-depth the specific means by
which to implement the application of preferential tariffs for products produced in the Gaeseong Industrial
Complex, which was agreed upon during the Korea-ASEAN summit meeting last year. The trade ministers
of the two parties are expected to discuss the key issues and pursue reaching an agreement on a more
detailed implementation plan at the Korea-ASEAN Economic Ministers Retreat meeting in mid-May, on the
occasion of the official signing of the Agreement on Trade in Goods.
6. The Korea-ASEAN FTA includes agreements on services and investment, in addition to the recently
concluded agreement on goods. Negotiations on the agreements on services and investment were
launched early this year and the parties aim to conclude these agreements before the Korea-ASEAN
summit meeting that is to be held this December.
7. During this round of talks, the Korean delegation was headed by Deputy Minister for Trade Kim Joong-
keun and consisted of around 20 representatives from the private sector and relevant ministries such as the
Ministry of Foreign Affairs and Trade, Ministry of Finance and Economy, Ministry of Commerce, Industry and
Energy, Ministry of Agriculture and Forestry, Ministry of Maritime Affairs and Fisheries, and Korea Forest
Service. Director General of the Ministry of Trade and Industry of Singapore, David Chin, headed the ASEAN
delegation, which was composed of around 70 members, including the representatives of the ASEAN
member countries and the related officials of the ASEAN Secretariat.
Spokesperson for MOFAT
* unofficial translation